December 13, 2017
Residents in Senegal are liable to pay tax on their worldwide income, irrespective of their nationality. Married couples are generally taxed separately but the head of the family may opt for joint taxation. Under the law, the following can qualify as dependants: (1) spouse with no income of her own, (2) minor or invalid children, (3) children under the age of 25 who are still studying, and (4) orphaned or abandoned children cared for by the taxpayer.
Taxable income includes (1) wages and salaries, (2) proceeds from agricultural activities, (3) proceeds from business or commercial activities, (4) proceeds from non-commercial activities, (5) income from real property, and (6) other income.
Income is generally aggregated and taxed at progressive rates. Total taxable income is calculated according to a scale of coefficients which vary according to the taxpayer's family circumstances:
|Singled, divorced or widowed with no dependent children|
|Married with no dependent children|
|Singled or divorced with one dependent child|
|Married or widowed with one dependent child|
|Singled or divorced with two dependent children|
|Married or widowed with two dependent children|
|Single or divorced with three dependent children|
|Married or widowed with three dependent children|
The taxpayer should add a half (0.5) share for each additional child, with the maximum number of shares is five (5). The taxpayer is entitled to one (1) share for an invalid adult child. An additional half (0.5) share will be given when only one spouse receives income.
The following income tax rates are applied to the taxable income appropriate to one share and the resulting amount is then multiplied by the number of shares appropriate to the taxpayer's family circumstances in order to calculate the total income tax liability.
EMPLOYMENT INCOME TAX
|TAXABLE INCOME, CFA (€)||TAX RATE|
|Up to 600,000 (€915)|
|600,000 - 890,000 (€1,357)|
|890,000 - 1,010,000 (€1,540)|
|1,010,000 - 1,410,000 (€2,150)|
|1,410,000 - 2,475,000 (€3,773)|
|2,475,000 - 3,540,000 (€5,397)|
|3,354,000 - 7,650,000 (€11,662)|
|7,650,000 - 9,650,000 (€14,711)|
|9,650,000 - 12,650,000 (€19,285)|
|Over 12,650,000 (€19,285)|
|Source: Global Property Guide|
Residents are entitled to the following deductions:
- Life insurance premiums
- Donations to charities and organizations acting in public interest up to a maximum of 0.02% of net income before deduction of charges
Some categories of income, such as income from real estate, are taxed at flat rates.
Rental Income Tax
Income from real estate is taxed at a flat rate of 20% on net income. In computing for the taxable income, the following can be deducted: (1) costs incurred in the repairs or maintenance of the property, (2) property tax paid by the owner in respect of developed land, (3) interests on borrowings in relation to the acquisition, maintaining or repairing the property, and (4) 20% of the gross rental income for depreciation and insurance.
Value Added Tax (VAT)
VAT is generally payable on rental income, at 18%. However, rental of unfurnished properties for residential purposes are exempted from VAT.
Capital Gains Tax
Capital gains realized from the sale of real property are considered as business income and are subject to corporate income tax at a flat rate of 30% on the net gains. The seller or the owner of the property is held liable for this tax.
In computing for the taxable capital gains, acquisition cost, registration costs, and expenses on the improvements or repairs are deductible from the selling price. In addition, the acquisition price will be increased annually by 1% starting from the fifth year of holding the property and by 2% annually after a 15-year ownership period.
Property Tax on Developed Land (contribution foncière des proprieties bâties)
Property tax is levied at a rate of 5% for all immovable properties except factories. The taxable value is the property's rental value, which must exceed CFA500,000 (US$762). The property owners are liable to pay for this tax.
This tax is levied on the following types of property: houses, factories, all buildings constructed in stone, wood, steel or brick fixed to the ground, non-cultivated lands intended for industrial or commercial use and, in general, all similar commercial or industrial installations.
Factories and similar industrial establishments are taxed at 7.5%.
Property Tax on Undeveloped Land (contribution forfaitaire des propriétés non bâties )
All land situated in urban or metropolitan areas which is either undeveloped or developed with buildings not fixed permanently on the property is taxable. The tax is levied at 5% of the taxable value (which is computed as 5% of the property's market value).
Income and capital gains earned by companies are liable to corporate income tax at a flat rate of 30%. Taxable income is calculated by deducting income-generating expenses from the gross income.